Bill Could Force Fines For Outages

DANIELA ALTIMARI, altimari@courant.comThe Hartford Courant

State lawmakers are proposing new standards for power restoration — and steep penalties for utility companies that fail to meet them.

"We have some of the highest electric rates in the country but we don't have the best service,'' House Speaker Chris Donovan said at a press conference Wednesday at the state Capitol complex. "You would think for the highest rates we would have better service.''

Donovan and Rep. Vickie Nardello, co-chairwoman of the legislature's energy and technology committee, will file a bill authorizing the state Public Utilities Regulatory Authority to establish a series of benchmarks for power companies. The proposal is modeled on similar rules enacted in Massachusetts in 2009.

"What we're here [for] today is to talk about being better prepared, to have a better restoration process that is backed up by law," said Donovan, a Meriden Democrat who is running for Congress in the 5th District. "If fines are a way to induce companies to do that, we will look at that."

The Massachusetts legislation was passed in response to frustration with the pace of power restoration following a devastating ice storm in central Massachusetts in December 2008. Some residents and businesses in northern Worcester County were without power for two weeks.

Levying fines on companies that fail to meet the benchmarks is a key part of the Massachusetts law, said Massachusetts state Sen. Jennifer Flanagan, who helped draft the measure.

"One of the big problems we have with utility companies is because they're so monopolized, they don't really start to respond until you hit them in the pocketbook," said Flanagan, a Democrat from Leominster, a small city in north-central Massachusetts.

The Massachusetts law requires utility companies to file a detailed emergency response plan with the state Department of Public Utilities, including any mutual aide agreements it has with out-of-state power companies to come in and help with cleanup and restoration efforts.

The law also stipulates that utilities report their compliance annually. If they have not met the standard, they may be fined up to 2.5 percent of their transmission and distribution revenues, which translates into roughly $20 million.

Following a nor'easter on Dec. 26, 2010, that left more than 110,000 Massachusetts customers without power, the utility company National Grid was ordered to pay $2.2 million in a settlement with the state.

Flanagan, who lost power for three days in the wake of last weekend's storm, said she was already thinking of ways to toughen the law. She noted that the state and municipalities are spending millions of dollars on storm cleanup, emergency shelters and other services for citizens impacted by power outages. Perhaps utility companies should be required to reimburse the state for some of those costs, she said.

The Connecticut law would be crafted to prevent utilities from passing on the cost of any fines they incur to their customers, Nardello said.

"You certainly wouldn't craft legislation that turned around and put the 20 million on ratepayers," said Nardello, a Democrat from Prospect who is among the hundreds of thousands of state residents without power.

"The goal would be that it would be born by shareholders, let's be pretty clear about that," she added.

Donovan, whose Meriden home is among the hundreds of thousands of houses and businesses in the dark, said the aim isn't to be putative but to use regulatory oversight to ensure utility companies put adequate restoration plans in place.

Regulators need to look at several aspects of a utility company's performance, from how well they maintain their infrastructure to whether they are adequately prepared in advance of an approaching storm.

"Let's face it, in this day and age, we know when the storms are coming at least 24 hours in advance and sometimes more than that,'' she said. "So you want to make sure the utility has made all of the efforts to do the preparation before the storm comes.''

Afterward, when the crisis has passed, regulators should do an "post-mortem' examining the company's effort, Nardello said.

As part of that, the state might require the utility companies to be more proactive in maintaining their infrastructure and trimming trees that could impact power lines. That would cost money, but Nardello said she believes customers would pay.

"A certain amount of rate increase, if its necessary to maintain the system ... I think you can talk to anyone in my town, where 100 percent of the power is out for all of these days, [and] they would say 'I would pay that,''' she said. "If you assess $30 million, that's 70 cents a month. Would you pay 70 cents a month to have your trees trimmed so you would not have as many storm-related outages? I think I would."

CL&P Reaction

Asked about the proposed legislation at a Wednesday evening news briefing, Jeffrey Butler, president and COO of Connecticut Light and Power Co., said: "100 percent of my focus right now is the restoration of our customers. … we'll work with the administration on the issues .. .we'll support what the administration's doing … we'll address that after this situation is completed."

Gov. Dannel P. Malloy, at the same briefing, followed up by saying, "First of all, I agree that all of this needs to be addressed and looked at seriously," which, he said, is why the "Irene commission" looking into recovery efforts after the tropical storm should now be come the "two-storm commission."

He also expressed support for "bench marking standards" and said "I think changes need to be made."

"You're talking to a guy who believes that the state needs to require of itself and of the utility and the utility partners .. that we do a better job," Malloy said.